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THE EIBG CLIMATE BANK ROADMAP 2021-25Stakeholder engagement webinars
23rd and 26th March 2020
Webinar 4: Increasing environmental sustainability investments and leaving no
one behind
Introduction:Nancy Saich, Chief Climate Change Expert, EIB
Adina Relicovschi, Head of Environmental Policy, EIBYasmine Pagni, Head of Social Policy, EIB
Planetary Emergency – A closer look at our planetary boundaries
BIOSPHERE INTEGRITY
BIOGEOCHEMICAL
Stockholm Resilience Centre, Stockholm University: https://www.stockholmresilience.org/research/research-news/2015-01-15-planetary-boundaries---an-update.html
2020-30: the critical decade for our lives and our jobsWEF Global Risks Report January 2020 – «For the first time in the survey’s 10-year outlook, the top five global risks in terms of likelihood are all environmental”
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.. And in impact terms Biodiversity loss is the greatest risk
Positive agenda:
Direct financing, finance
mobilization to generate
positive impacts
Mainstreaming into decision-
making process:
Setting specific targets,
developing thematic strategies,
ensuring alignment of all its
operations
EIBG Environmental & Social Sustainability Policy
Defines underpinning of and modalities for EIBG’s contribution
to sustainable and inclusive development
EIB(G) response: E&S Sustainability Framework
Lisbon Treaty
(2007 2009)
EU Charter of
Fundamental Rights
(2000 2009)
High Level Political
Agenda/Commitments
Operationalisation
In both areas, the EIB(G) can provide advisory support and
engage in relevant policy dialogue
Counterparts and EIBG
responsibilities:
E&S Standards (DNSH & MSS);
Due-diligence, MRV, Transparency
& Accountability
Post 2020 Environmental Sustainability Objective
EIB’s current Environment Public Policy Goal has been structured to
reflect the objectives of the EU Environmental Action Programmes – it
also reflects the key environmental sustainability objectives of the
EU Taxonomy;
In 2019, environmental sustainability investment under our Environmental
Public Policy Goal, contributed more than EUR 2 billion of
environmental financing in addition to our climate finance;
From 2021, EIB will be adding environmental sustainability to the climate
action target, to capture investments with substantial contribution to all
environmental objectives, and will report annually on climate action and
environmental sustainability;
The environmental sustainability finance definitions will be refined as
the EU taxonomy is developed for the different environmental
objectives.
The social dimensions of climate change
Place of living Source of income + Wealthy or Poor
Young and Old
Indigenous People
Women and Men
• Limiting warming to 1.5 degrees
could reduce the number of people
exposed to climate risks and
vulnerable to poverty by between 62
and 457 million people worldwide
• Depending on how climate
mitigation and adaptation projects
are designed and carried out, they
may have synergies or trade-offs
with social development
Source: IPCC
Social development as a key element of EIBG holistic approach
Finance climate actions with high social benefits
Promote social development as a means to strengthen resilience, adaptive capacity and enabling climate action
Integrate social dimensions in its climate and broader policies, impactmeasurements & monitoring frameworks
More sustainable, inclusive and
peaceful societies
People whose livelihoods are impacted by the transition are supported in finding alternatives
People’s resilience and adaptive capacity is enhanced especially among those that are vulnerable to climate change
People’s quality of life is improved through climate actions designed to have high social benefits
People are empowered as climate actors and enabled to adopt more sustainable practices
EIBG Actions Outcomes Goal
EIB contributes to - in combination with actions of other actors
Climate investments meet social standards and promote Human Rights
A
Support a socially fair and just transition in the EU & Beyond
B
C
D
E
Just Transition entails multiple transitions
‣ Environmental transition
‣ Socioeconomic transition
‣ Infrastructure transition
‣ Energy transition
} Wider regional development
dimension
There are many other topics to discuss today.We are here to listen! Here are some of our key questions:
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• In which types of projects that EIB can pursue do you think there are likely to be natural synergies for environmental sustainability and climate action?
• In which cases do you think there might be potential trade-offs? How can they be best reconciled?
• Which type of climate action and environmental sustainability projects that EIB can pursue are likely to have strong economic and social benefits (e.g. social inclusion, gender equality, poverty reduction, economic resilience, conflict prevention, indigenous people’s rights)?
• Who are the partners/promoters in the market specifically targeting multiple social, environment and/or climate impacts that we can work with?
• Which type of social investments can be catalytic to strengthen resilience and promote climate action?
• What are the core elements of a Just Transition, both inside and outside EU, and what can the EIB Group contribute to make it a success?
Thank you!More information at: [email protected]
Project examples – promoting synergies
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Ecoenterprise Fund III
Investments in women owned pro-
biodiversity businesses in forest and
agriculture sector.
Engages with portfolio companies to hire
women at all levels and invest in their well-
being
Bangalore Metro
33% of the job opportunities reserved for
women with targeted interventions for
women to be trained as conductors
Crèche facilities for employee children,
gender responsive scheduling and safe
spaces
Women only carriages to lower the risk of
sexual harassment.
Kenya D-Light
Off-grid renewable energy
solutions in Kenya with pay-as-
you-go scheme improving
lighting at home and enabling
women entrepreneurs to keep
businesses open and
Example 1: EIF Impact Performance Methodology for Thematic Impact Funds
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1. Fund Manager Commitment
The fund manager commits to define, measure and report on the impact achieved by its underlying portfolio companies.
2. Joint definition of impact indicators
Portfolio companies, in coordination with the fund manager, are asked to define from 1 to 5 impact indicators and set pre-investment target values for each of these impact indicators to be achieved within a certain timeframe.
3. Disclosure of indicators, targets and achievement
Fund managers disclose impact indicators and pre-investment target values to their investors and calculate on a regular basis (at least once a year) the impact multiple, defined as the comparison between pre-investment target and realised value.
4. Link financial incentives to impact performance
The financial performance incentive of the fund manager (carried interest) is subsequently subject to the impact performance of the fund in addition to its financial performance.
EIF Managed Resources
Social, Climate,
Environmental Impact Fund
Social, Climate,
Environmental Impact Fund
Social, Climate,
Environmental Impact Fund
Enterprise Enterprise Enterprise Enterprise Enterprise
2020-30: the critical decade for our Climate and our Environment(the planet will be still there)
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If we continue to delay reducing GHG emissions, we make it harder to achieve 1.5 degrees temperature target –with massive impacts on people and nature (ref IPCC 1.5oC reports).
More delay requires even faster GHG reductions (ref latest UNEP GAP report); technology shifts; more money; and creates higher risks of an UNJUST transition for people affected, as capital flies away from emitting sectors so fast it causes major job losses and economic crises.
Graphic (Sources: Stefan Rahmstorf/Global Carbon Project http://GO.NATURE.COM/2RCPCRU
Sustainable development - at the core of the EIB Group’s values
Agenda 2030 & the SDGs calls for an integrated approach and recognizes that development must balance social, economic and environmental sustainability: policy coherence.
Paris Agreement notes the importance of ensuring the integrity of all ecosystems, including oceans, and the protection of biodiversity. Climate Action needs to respect, promote and consider a range of human rights, including indigenous peoples, local communities, migrants, children, as well as gender equality rights.
EU Green Deal: an commitment to put Europe firmly on a new path of sustainable and inclusive growth, by achieving its environmental ambition while recognizing that the transitions must be just and inclusive.
Sustainable Finance - EU Taxonomy: calls for a shift of capital flows towards more sustainable activities that has to be underpinned by a shared, holistic understanding of the environmental sustainability of activities and investments: “do no significant harm” and “meeting social safeguards”
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27/03/2020European Investment Bank Group
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All activities are Paris aligned
by end 2020
(EIBG)
>50% “CA&ES” by 2025
(EIB)
The EU Climate Bank 3 targets:
1. A commitment to grow sustainable finance from
billions to trillions. By working with our public and
private partners the EIB Group will aim to help unlock at
least EUR 1 trillion of investment by 2030. This will
include a marked increase in support for climate
adaptation and resilience.
2. An increase in EIB’s own financing for climate action
and environmental sustainability (CA&ES). EIB to be
much bolder and aim for 50% for CA&ES by 2025.
3. A commitment to align all the EIB Group’s financing
activities with the principles and goals of the Paris
agreement by the end of 2020. This builds on our 2015
Climate Strategy, which committed us to mainstream
climate change considerations in “everything we do”.
EIB’s new ambition for 2021-2030
And to increase investments in environmental sustainability….
Just Transition: wider regional dimension
Addressing affected regions’ challenges:
Place-specific and multi-sector: address specific economic, social and
environmental challenges in vulnerable communities
Plan-led: need a Just Transition Masterplan that coordinates the sectoral needs
under a sound governance structure
Build on existing strengths
Avoid pitfalls of historic transition experiences
The EIB response will:
Be Paris-aligned & in line with new EIB Energy Lending Policy
Build on experiences in the affected regions supporting economic
diversification/restructuring
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European Investment Bank
Examples from past EIB operations
Multi-sector Framework Loans:
‒ Long track record in (Upper) Silesia, several loans to
Katowice
‒ Recently loans with towns of Legnica, Zabrze, Czestochowa
and Walbrzych (urban revitalization)
‒ Co-financing of EU funds in Castilla-y-Leon, Moravskoslesko
in support of restructuring & diversification
EIB in large environmental remediation projects:
‒ Rehabilitation of brownfield areas in East Germany
(Braunkohlesanierung Lausitz)
‒ Renaturation of the Emscher river (Ruhr area, DE), one of
Europe’s largest environment remediation projects restoring
an entire river and its surroundings 19
European Investment Bank
Just Transition: Summing up
Just transition = multiple transitions
Successful transition: place-specific, plan-led, multi-faceted,
building on existing strengths, learning from earlier transitions
elsewhere
EIB will support all 3 pillars of the JTM through lending,
blending and advising
EIB has track-record in remediation and revitalisation projects
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